Income Tax (Trading and Other Income) Act 2005 section 857

Partners to whom the remittance basis applies

Section 857 sets out how a partner's share of trading profits is taxed when the partnership trades wholly or partly overseas, is managed and controlled abroad, and the partner is taxed on the remittance basis.

• The section applies where a firm trades wholly or partly outside the UK and its control and management is outside the UK, and the remittance basis applies to a partner for the tax year.
• The partner's share of UK-arising profits is calculated using the normal partnership profit-sharing rules (sections 849 to 856 of ITTOIA 2005).
• The partner's share of profits arising outside the UK is treated as relevant foreign income, meaning it is only taxed when remitted to the UK.
• This section was amended by Finance Act 2008 to align with the revised remittance basis rules in sections 809B, 809D and 809E of ITA 2007.